Intregrated Marketing Communication on Malaysia Airlines


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Intregrated Marketing Communication on Malaysia Airlines

  1. 1. P a g e 1 | 24 Integrated Marketing Communication – Malaysia Airlines ExecutiveSummary of Malaysia Airlines: MAS has certainly come a long way. For the financial period 2005 (9 months), MAS reported a loss of over RM1.3 billion – the biggest in the company’s history – and it was expecting to hit an even deeper loss of RM1.7 billion for the full year 2006. The financial position was so precarious that we had only a few months until April 2006 before we ran out of liquidity. In the wake of the profit and cash crisis, we announced our Business Turnaround Plan (BTP 1) in February 2006. The BTP 1 was developed using the Government-Linked Companies Transformation (GLCT) manual as a guide, and targeted to cut our losses from RM1.7 billion to RM620 million in 2006, achieve a profit of RM50 million in 2007 and a profit of RM500 million in 2008. With hard work, radical changes and tough decisions, we were able to overcome the cash crisis to ensure our financial survival in 2006, achieved a record profit of RM610 million for the 9 months, year-to-date to September 2007, and we are now on track to generate further profits in 2008. We made it! We have demonstrated to our stakeholders, nation and world at large that we are a winning team. However, new challenges loom ahead of us. The single largest concern that MAS will face in the industry is overcapacity. Based on industry estimates, about 400 plus new aircraft have hit the skies of Asia Pacific, India and Middle East in 2007, and another 400 plus is expected in 2008. This phenomenon of unbridled growth will intensify competition in the market, and erode our yield and profit margins. Coupled with the liberalization of ASEAN skies and rising oil prices, MAS will, with everything else remaining equal, inevitably hit a wall and fail badly if we do not transform ourselves. Thus, as we go into 2008 and beyond, our focus will clearly need to shift to securing our future success. This phase represents the most challenging yet for MAS – this is the real mountain that we need to scale. To chart our path onwards and upwards, we have developed a Business Transformation Plan (BTP 2). The plan, outlined in this document, will build on the 5 key thrusts of The MAS Way (see Exhibit 1) which served as the guiding principle for our BTP 1.
  2. 2. P a g e 2 | 24 Integrated Marketing Communication – Malaysia Airlines The global airline industry is in a state of turmoil and it is increasingly clear that the survivor and most certainly the winner will have to make radical changes to adapt to the new environment. (MAS) reported a loss of over RM1.3 billion. This announcement came at the same time as some of regional competitors reported strong profits. The result is unacceptable. A real business turnaround is an imperative of MAS. The new environment will continue to hits MAS hard. The projections for MAS for 2006 look dismal. In fact, on its current business assumptions, course and speed, MAS will likely fail, running out of cash in April 2006, and reporting a RM 1.7 billon loss for 2006. The management team, and staff, however, believes strongly in ability to transform the business and, indeed last go beyond expectations. MAS have done much to improve its performance over the 5 years and indeed last year. MAS have much to be proud of, and this work will form the foundation of their success. With hard work, radical changes and some tough decisions, MAS can certainly be a survivor and a winner. Since early December 2005, the management team has dedicated itself to the development of a plan that builds off the actions taken by the Board 2005 to begin the turnaround.. These plan will not only reverse the loss and return MAS to profitability, but also transform the company into a strong and vibrant institution one that is capable of withstanding external shocks and aggressively tackling new opportunities. Business Turnaround plan has been developed using the GLC Transformation Manual as a guide. It takes into account the recommendations in the manual and adapts these for implementation in MAS in the context of the business turnaround. The plan, outlined in this document, has five central thrusts, each symbolized by a tail of the venerable MAS symbol. By achieving the plan will enable mas to realize a net income of RM 500 million in 2008 an all-time high profit for MAS and to be well positioned to improve its net income even further. In the report, certain parts have been included as briefly about Malaysian Airlines Systems (MAS). The main part discussed are the short history about the firm (MAS), the industrial overviews by Porter’s five forces model to analyze the completion, the SWOT analysis to identifyspecific competences. In short history, background of the company, vision mission and future managing service quality is discussed. It is the
  3. 3. P a g e 3 | 24 Integrated Marketing Communication – Malaysia Airlines mission of Malaysia Airlines System Berhad, as a corporation, to provide a safe transport facility which now in 2014 seems hard to gain the trust after the incident of flight MH307. A Definition of IMC: “Integrated Marketing Communication is a process for planning, executing & monitoring the brand messages that create customer relationships” (Duncan, Principles of Advertising & IMC, 2005:17) IMC “is the coordination and integration of all marketing communication tools, avenues, and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost” (Clow&Baack, 2007, p. 8). Impact of IMC: IMC plays a role in all:  Business-to-business (B2B) interactions.  Marketing channel communications.  Customer-focused communications.  Internally directed communications. The Goal of IMC: As with all marketing activities, the goal of IMC is to build brands. Brands that are well known and liked are more likely to be purchased → increase profit margins. Brand Equity: “the intangible value of a brand – value added to a product or service that derives from a perception in customer’s minds” (Duncan, 2005, p. 8). Value of IMC: The importance of Integrated Marketing Communications was until a few years back only understood by the small business owners and growing companies but of late, its
  4. 4. P a g e 4 | 24 Integrated Marketing Communication – Malaysia Airlines value has also been acknowledged by the large corporations and big companies as well. The reasons for this trend are the following: 1) In the background of the global economic meltdown, the competition amongst the businesses has become even stiffer and marketing has assumed a greater importance than ever before. 2) New methods of marketing have evolved in the recent past and no business or company can afford to ignore them. 3) Because of a flood of marketing materials and advertisements, it has become harder for the companies to have their marketing messages imprinted in the minds of the people. Integrated Marketing Communication is directed to combine the marketing efforts from the online and the offline sphere to derive maximum benefit from the whole marketing strategy. The online components of marketing used are B2B website design, email newsletters, pay per click advertising, search engine optimization, Facebook marketing and many more similar strategies. The offline or the traditional marketing strategies include direct mails, public relations management through the public relations firms and many more traditional advertising methods. Not to forget, the interpersonal marketing methods are not out of the scope of integration. The core idea behind integrating the marketing communication is to help the people internalize your marketing message by exposing them to the same message several times through different online and offline means. With the ever increasing trend of integrated marketing communications, many agencies have come up that handle all the aspects of integrated marketing. These agencies rely on a network of trustworthy service providers that handle different aspects of marketing including printing, promotion, online marketing etc. If you opt for the integrated marketing agencies, you can be rest assured that your marketing campaign becomes more efficient, is carried out at a fast pace and is cost efficient at the same time.
  5. 5. P a g e 5 | 24 Integrated Marketing Communication – Malaysia Airlines One of the most important aspects of these marketing campaigns is the planning of the marketing campaign. You should carefully select the online and offline marketing components that you wish to use by keeping in mind your target audience and the efficacy of each component. This would determine the cost of the whole campaign and you would not have to care for the cost of entire plan. Another very important aspect of integration is the link between the various marketing components that helps in establishing a continuity which increases the chances of retention of the marketing message in the minds of the people manifolds. The efficiency in linking the various online and offline components is of great importance to ensure that the marketing campaign stands out amongst the rest. Benefits of IMC:  IMC provides greater  Brand differentiation  Accountability within a firm  Trust among consumers.  Levels of effectiveness in cutting through message clutter than single strategies. The Changing World of IMC: Old World New World “Talking At” Consumers Focus on Winning New Customers Two-way Dialogue with Consumers Focus on Building Long Term Relationships with Consumers
  6. 6. P a g e 6 | 24 Integrated Marketing Communication – Malaysia Airlines IMC – The Evolution: To IMC & the need for integration:  Covers a number different media and strategies  TV, radio, Direct, PR, social media etc  Selective combination of appropriate types of communication  Meeting a common set of objectives for the brand  Integration over time with regard to customers  Integration provides synergy The Importance of Integration: Integration begins with the way a company and its agencies organise the process for creating and delivering brand messages. All participants involved in creating and delivering brand messages must work together: Marketers Relied Primarily on Advertising and Promotions Marketers Use and Coordinate Many Different Forms of Communication with Consumers Mass Marketing Using mass communication Relationship Marketing Using integrated marketing communication with a focus on interaction
  7. 7. P a g e 7 | 24 Integrated Marketing Communication – Malaysia Airlines  The company  Company agencies  The media  Channel members  IMC support services. Integrated Marketing Communications Model:
  8. 8. P a g e 8 | 24 Integrated Marketing Communication – Malaysia Airlines Introduction:
  9. 9. P a g e 9 | 24 Integrated Marketing Communication – Malaysia Airlines MAS was founded in 1947 by Malayan Airways. With the formation of Malaysia in 1963 the airline changed its name soon after to Malaysian Airlines. MAS is the government owned flag carrier airline of Malaysia. Flights are operated from KLIA and Kota Kinabalu. It also operates transatlantic and transpacific flights. MAS has received more than 100 awards in the last 10 years such as the “World’s Best Cabin Crew” and “5-star Airline”. MAS is listed on the stock exchange of Bursa Malaysia by the name Malaysia Airline System Berhad. Malaysian Airlines – VISION – MISSION - STRATEGY Present problem of MAS: Malaysian airlines (MAS) used to be the national pride of Malaysia. It symbolisms modernity and the vision to achieve continues growth and advancement for our country. The company gain reputation as an airline that provided good hospitality for the passengers. It all seems good for MAS; however MAS keep suffers a lot of losses and declining revenue over the years.In 2011, MAS recorded a mind-blowing loss of RM2.52 Billions. One might say that it is due to economic downturn or recession, but other competitor airlines are actually making profits. Among the airlines that recorded profits is Singapore Airlines, British Airways and Cathay pacific, all the competitors of MAS reported a profitable year, but why MAS still
  10. 10. P a g e 10 | 24 Integrated Marketing Communication – Malaysia Airlines recorded such a big loss? We need to examine the marketing mix of MAS in order to find the problem and the solution to the problem faced by MAS. It is expected that MAS might be bankrupt after second quarter of 2012 if no steps are taken to solve problems faced by MAS. Malaysia has now met with a similar removal of a passenger plane's electronic capabilities, no distress signal and complete disablement over the ocean. It's as if a kill switch was flicked - literally. What might be bugging the world's militaries on this occasion, and cause them to pick out Malaysia for a bit of the treatment? Facts at present issues:  The black box emits a signal which can be picked up hundreds of miles away... still no sign of wreckage more than 36 hours after disappearance from radar  No adverse weather conditions  No kind of distress signal sent  The pilot has (had) over 18,000 hours of flight experience, since 1981  The plane model has no significant history of safety or mechanical failures This kind of thing has been going on there for a while. Blair and Bush were declared to be war criminals by the Kuala Lumpur War Crimes Commission in 2011, which has had a great impact on their worldwide reputations. The War Crimes Commission has been recently attacking Israel for its treatment of the Palestinians. That never goes down too well, especially when Israelis are involved in managing the situation on the streets of Kiev. It's another way of raising the threat level for Putin.
  11. 11. P a g e 11 | 24 Integrated Marketing Communication – Malaysia Airlines SWOT Analysis: It is a general examination of a business’s current position so that it can identify the preferred decisions in the future. The following is the SWOT analysis for MAS: Strengths: Weakness: Brand name Improvement in yield Diversified Revenue stream Low labour costs Accreditation Well-trained employees Lower margins Weak cash flow Unprofitable routes High Costs Inadequate marketing skills Ineffective utilization Opportunities: Threats: Launching Firefly Expansion towards Asia Pacific Increasing cargo traffic Increase in fuel prices High Competition Foreign currency fluctuation Terrorism & Health Awareness Strengths:  Highly recognizable brand name established a strong brand image domestically as well as internationally. MAS’ airlines has built a strong name for themselves in the aviation industry.  Improvement in yield an increase in yield which is defined as revenue per passenger kilometre.  Diversified revenue stream MAS airlines generates revenues from various areas, such as, which deal with freighter flights and aircraft cargo hold. It has also diversified into related industries such as aircraft ground handling, aircraft leasing, aviation engineering, and flight catering and tour operations.  MAS have revenues coming in from non-aeronautical areas such as maintenance, repair, overhaul and aircraft handling.  Low labour costs MAS has the lowest labour costs than other airlines.
  12. 12. P a g e 12 | 24 Integrated Marketing Communication – Malaysia Airlines  Accredited by international bodies MAS has won numerous awards from international bodies and is accredited by the IOSA for its safety practices.  Well- trained employees its flight attendants undergo extensive training. Unlike other airlines where they promote the different routes and destinations they provide, MAS airlines use they’re flight attendants to promote the airline. MAS branding strategy is for the general public to portray them as hospitable and friendly. Weaknesses:  Low margins Low margins Even though MAS has a strong revenue growth, its operating margins are well below the industry average. This effects the airlines growth plans and puts it at a competitive disadvantage.  Weak cash flow Weak cash flow the airline has been reporting negative cash from its operations.  Several weaknesses were due to the RM 1.36 million loss which was caused by the increasing fuel prices.  Unprofitable Routes Unprofitable Routes In 2000, the airline suffered further losses, therefore lead to MAS airlines to discontinue flights to unprofitable routes such as Brussels, Darwin, Honolulu, Madrid, Munich and Vancouver.  High costs High costs included staff costs, handling and landing fees, aircraft maintenance and overhaul charges.  Low Productivity  Marketing skills are inefficient and are only focused on expanding to fast.  Ineffective utilization of resources and partnerships Opportunities:  Launch of firefly Launch of firefly has to subsidiaries; Firefly and MASwings. Firefly is Malaysia’s first community airline. It is expected to gain a potential customer base of 100 million in the Indonesia- Malaysia-Thailand area. MAS airlines set up Firefly as a test-bed in managing low cost operation.
  13. 13. P a g e 13 | 24 Integrated Marketing Communication – Malaysia Airlines  Expanding passenger traffic in Asia Pacific Expanding passenger traffic in Asia Pacific MAS airlines covers several destinations in Asia, like China, Japan, India and the Middle East, where the demand for travel is high. More than 15% of MAS revenues derive from the Asian region.  Increasing cargo traffic increasing cargo traffic there has been an increase in cargo traffic in South East Asian countries. This is due to the growth of export related industries. Therefore, MAS airlines benefits from the increase in demand for air cargo services. Threats:  Increasing jet fuel prices increasing jet fuel prices the dramatic increase of fuel prices affect most airlines. It is one of the operating expenditures for MAS airlines.  High competition High competition Faces intense competition from other airlines. The airline faced major competition internationally from established airlines and new start-up operations.  Foreign currency fluctuation foreign currency fluctuation MAS’s revenue is denominated in different foreign currencies which results in the fluctuations of foreign exchange rate. The airline uses foreign currency borrowings as its strategy to manage the risk of foreign fluctuations. Undertaking this risk leads to a decline in growth.  Terrorism and Health scare Terrorism and Health scare Political and Economic events such as the September 11th attacks and the Swine Flu effects the aviation industry considerably. The airline also suffered losses of RM 260 million during the Asian Crisis in 1997. Improving MAS:  Restructuring and solving MAS ongoing weaknesses, is analysing which routes are unprofitable for the airline and therefore discontinuing flights to those destinations to cut its losses and focus primarily on profitable high-
  14. 14. P a g e 14 | 24 Integrated Marketing Communication – Malaysia Airlines growth routes. The airlines should also maintain their existing routes which are of high importance, thereby providing at least daily flights.  MAS should utilize and maintain alliances with other airlines. This allows it tap into other destinations around the world, therefore allowing MAS to expand and provide flights where there unable to.  MAS can reduce its high expenditure costs, by managing its costs and budgeting. By training staff to be more specialized and/or to employ staff that are able to carry out different tasks. Therefore, would minimize the problem of overstaffing.  The airline suffered high losses over the years due to poor management. The airline should conduct proper training to existing managers. Hence, employ suitable candidates for the position.  Implement new Marketing Techniques to sell higher margin services and the airline should keep in mind that the organization cannot be successful in a day.  To boost margins is to change the mix of business by hiring new sales people who are capable of selling, hire new staff, open new locations or update offices. Current situation of Malaysian Airlines: Malaysian Airlines are in a position of crisis. The company has incurred a net loss of RM 1.2 billion in the first three quarters of 2011 alone. Almost 40% of the total routes in which the airline operates is incurring losses. The position of the company is even more tenuous as compared to the crisis which the company faced in 2006. The market of aviation is becoming competitive with the entrance of the low cost carrier (LCC) in the market and the growth of the Middle Eastern full service carriers and even the revival in the fortunes of Asian full services such as Garuda, Japan Airlines and Thai Airways. Malaysian Airlines had not focused on the premium segment of the market, even the quality of the product has fallen. The major marketing efforts of the company were focused on tactical sales promotion instead of brand building. Even with great efforts
  15. 15. P a g e 15 | 24 Integrated Marketing Communication – Malaysia Airlines from the side of the sales team the profits generated is really low which is quite low to cover the increasing cost structure. Demand in the Asian aviation industry is quite strong. Throughout Asia there is a huge growth in the disposable income of the people, access to the credit card is increasing and a cross border trade is very popular, with well-developed infrastructure and population of south east Asia alone is around 500 million there are huge growth potential for the aviation industry so in order to revive from its current status Malaysian Airlines has a great plan for success. Malaysian Airline recovery model from 2011 crisis: To achieve its vision of becoming a preferred premium carrier begins with some fundamental remodeling of the core business. It is based on sheer simplicity of focus and is very basic in nature. The company will study the strategy utilized by other airlines to achieve success and adapt it effectively in a unique way. 1) Smaller yet profitable networks: The airlines would include only those routes where the premium travelers would like to go so that they can win competitive position and home advantage. The company is planning to shrink in order to grow and the moment they are able to achieve financial stability they will expand their network to cover world’s major economic regions and hubs. Malaysia Airlines (Kuala Lumpur) will drop the following seven routes in early 2012 from Kuala Lumpur according to its new business plan (as per Airlinegallery .com, 2011) Surabaya (January 6, 2011) Dubai (January 10, 2011) Karachi – Dubai (January 12, 2011) Dubai – Damman (January 13, 2011) Johannesburg (January 31, 2011)
  16. 16. P a g e 16 | 24 Integrated Marketing Communication – Malaysia Airlines Cape Town – Buenos Aires (February 1, 2011) Rome (February 2, 2011) 2) Win back customers: The company plans to take delivery of 23 aircrafts in the year 2012, each having state of art passenger amenities. Anew sales and marketing plan will come enforce which will help the airlines to win back its hard earned loyal customers, especially the ones from Malaysia and convince them of the enhanced services provided by the airlines. 3) Relentless cost focus: As new aircraft would be purchased by the company it will fully utilised the advantage of its improved efficiency which would comprise of lower fuel bills and maintenance expense initially. The focus would be to keep the overhead and discretionary expense to the minimum. 4) Keep it simple: The business structure of the company has become very complex with a group of entities operating together- core full service airline, MASholiday, MAS aerospace Engineering, training, catering, and ground handling. The company is planning to remove this clutter and focus on its prime business activity flying so it is planning to give sufficient amount of freedom to its ancillary business units so that even they can utilize their potential to the fullest. 5) Launch of new regional premium airline: In 2012 the company plans to launch its new short haul brand which would be flying entirely on the new Boeing 737-800. The smaller Boeing size would enable the airlines to fly to more places where the customer wants to travel and even sometimes according to their convenience. A separate management structure would be brought enforce to focus on the unique needs of the premium travel customers.
  17. 17. P a g e 17 | 24 Integrated Marketing Communication – Malaysia Airlines The airlines would set new standards of product service and quality which would include high degree of cost and operational efficiency. 6) Alliances and partnership: The airlines plan to join the extensive global network and looks forward to increasing traffic with the help of combined networks and infrastructure. The airline plans to enter into material partnerships with major airlines to strengthen its international presence. 7) Branded customer experience: The customer would be top priority of the airlines and an improved experience would be provided at all touch points pre-flight, in-flight, and post-flight. 8) Continuous operational improvement: To support the vision of becoming a preferred premium carrier the airlines would be making substantial changes at the operational level to excel on three lines: commercial effectiveness, flight operations and cost management. In order to determine the success of the future strategy the current market condition of the airline industry must be brought into focus. So to analyze the market attractiveness porter’s five force model would be best suited (Douglas). Porter’s Five Force Model: 1) Industry competitors:  Local competitors are Air Asia, Firefly, etc  International competitors- Singapore airlines, Garuda, Cathay Pacific, Thai International Airways  Other Low cost Airlines- Compass, Tiger Airways, Cebu Pacific, Jetstar Asia Airways, Impulse, Virgin blue Airlines.
  18. 18. P a g e 18 | 24 Integrated Marketing Communication – Malaysia Airlines The number of competitors is very high and with the emergence of low cost carrier and deregulation the internal competition has increased and the only reason that reduces it is the low and highly volatile profitability. 2) Suppliers Power:  Fuel prices are ever increasing affecting the cost so the supplier power is high.  The Asian airline industry is very optimistic about the growth potential of the Asian aviation industry so is placing huge aircraft orders thereby increasing the bargaining power of the suppliers again  The civil aircraft industry is monopolized by two major aircrafts manufacturers  Large capital required so the leasing companies come into picture.  Highly specialized and professional employees are required to maintain the status of five star carrier services.  The recent crisis in the overall airline industry has to some extend lead to a reduction in the prices of the aircrafts. 3) Buyer’s power:  Local population (Malaysian)  Southeast population- Indonesia, Thailand, Singapore, etc.  There is no switching cost as the buyer can easily switch from one airline to another so the power of the buyers increases.  There is a very low product differentiation so to succeed providing either services at very low cost or give a five star experience so that customer pays the price for the superior services offered.  The availability of information is really high and with the emergence of travel portals who guarantee that they can search for the lowest fares out of all the options available and book it for the client with just a click which even provides the ease of purchase, the bargaining power of the buyer is increasing
  19. 19. P a g e 19 | 24 Integrated Marketing Communication – Malaysia Airlines  Frequent flyer program and online duty free purchase services can create customer loyalty and reduce the threat of customer switching over to other airlines to some extent.  Low buyer concentration can also reduce the power of buyers. 4) Potential entrants:  Airline industry has a high barrier to entry and exit as once an airline is operative then exist from the industry would amount to huge amount of loss.  Licensing is one of the major barrier for the industry.  JV and partnership is the most recent trend in the industry which has increased the threat to this industry.  High unit cost makes the entry to the industry unattractive.  There are no economies of scale and scope available.  Deregulation has to some extend reduced the restriction to the entry in the industry.  Internet has again increased the new entrant possibility in the industry. 5) The substitute:  The surface transport can be substitute.  With the advancement in technology for many thing travelling personally is not important as with the help of web conferencing and services like online counselling the need for travel is reduced.  The customer can switch to modes which are reasonable in terms of fare as air travel to some extend is expensive as compared to other modes of travel.  The factor which alone reduces the attractiveness of the substitutes in the minds of the travelers is the fastness and reliability of air travel. With the help of Porter’s model we have the various micro conditions under which the airline operates and now I would like to discuss the macro environment of the airline industry with the help of Pest analysis
  20. 20. P a g e 20 | 24 Integrated Marketing Communication – Malaysia Airlines PEST ANALYSIS: To analyze the economy in the macro perspective we need to study the Political, economic, social and technological environment of Asia as a whole. 1) Economics The rapid growth of Asia fuels the growth of the air travel in Asia. The growth is also because of the region being geographically dispersed and the countries having a large population. The governments of the various countries have invested in the
  21. 21. P a g e 21 | 24 Integrated Marketing Communication – Malaysia Airlines development of airlines and travel infrastructure and have made investment in the airports to make them competitive with the rest of the world. Again with high growth and increase in trade and business the competition has increased which has led the full service airlines like MAS to start cost cutting. In the view of many economists Asia would soon be on the top of the global economy growth charts. 2) Political/ Legal: Government policies are important drives for the success of Asia. In the late1990s, there was increase privatization and deregulation of the airline industry in Asia. It was noticeable that some Asian countries established open-skies agreements while others allowed the entry of private airlines. For instance, in 1997, a few LLC spouted quickly after Malaysia signed an “open-skies” agreement with the United States. Hence, it appears that although the travel market will be expanded, in reality MAS would also have to operate in a more challenging environment with intense competitions. 3) Social-Cultural: Surveys revealed that more people were willing to compromise on food and other services in exchange for lower prices. In fact, it was stated that price of tickets was the single most important consideration that influenced passengers’ decision in case of a conscious leisure passengers who are always looking to make their budgets decrease further. This presents an opportunity for all LCC increase their revenues by offering travelling at a much lower fare. With the entry of such low cost carriers the competition for the full service airlines like MAS increased so the company has to segment its market and target only those high class premium business travels for whom service and luxury is very important and are not concerned about their budget. 4) Demographic: In 2005, the total population in Asia stands at more than 3.5 billion. The United Nations’ statistics also show that Asia has an astonishing demographic dividend – where more than 35% of its population is below the age of 25 and more than 55% hovers below the age of 35. This shows that the population of middle age is group is
  22. 22. P a g e 22 | 24 Integrated Marketing Communication – Malaysia Airlines increasing thereby increasing the number of working population which results in the increase in the overall disposable income and so the number of business and leisure travelers is bound to increase. This therefore presents a golden opportunity for MAS. 5) Technological The technological advancement including introduction of services like internet telephony and use of various other telecommunication services ( like buying of tickets online) provides MAS a new arena to boost up its sales by leveraging the new technology. The use of e-commerce and internet based activities which includes reserving a holiday online and even buying tickets online opens ways to derive ancillary revenues. Technology advancements sometimes also help in reduction of the operational cost such as savings on commissions for travel agents.
  23. 23. P a g e 23 | 24 Integrated Marketing Communication – Malaysia Airlines Conclusion: MAS though currently does not have a strong presence in the region, the macro environment of Asia presents vast opportunities to enlarge the company’s market shares. The Airline businesses are closely linked to economic activities in Asia and the world. As such, MAS needs to be cognizant with the business cycle so that it can to take full advantage of such effects especially when there are changes in discretionary income and consumer spending patterns. The company should also keep in mind that increases in the demand of fuel and limited supply can lead to higher fuel price that will decrease the yield. Last but not least, the impact of crisis such as 9/11 (2001) and SARS outbreak (2003) was able to hit the airline industry badly and as such they continue to pose serious threat to airlines.
  24. 24. P a g e 24 | 24 Integrated Marketing Communication – Malaysia Airlines References:  2014. [ONLINE] Available at: [Accessed 18 April 2014].  Malaysia Airlines Unveils Major Network Restructuring Program. 2014. Malaysia Airlines Unveils Major Network Restructuring Program. [ONLINE] Available at: [Accessed 28 April 2014].   SWOT analysis and for Malaysia Airlines(MAS)?. 2014. SWOT analysis and for Malaysia Airlines(MAS)?. [ONLINE] Available at: [Accessed 28 April 2014]. 